Canard of the Week: Free trade Agreements

One way cronies and dirty politicians are scamming you - one of many.

May 22, 2015

Let’s work our way backward in time. Keep all the lessons in mind as we navigate the potential Trump trade wars. Throughout, remember that tariffs and subsidies NEVER benefit the American worker writ large. They only provide a direct benefit to protected cronies and the governing class. There is a bleed over for people who work for the protected cronies, but the drag on the economy is always greater than the narrow “good” provided by tariffs and subsidies.

2025

I said recently that free trade = we sell you our stuff, unimpeted and you do the same here. Anything else is NOT free trade. And truly free trade is the ONLY answer to putting all the world’s leading economies on the fast track - especially ours. If others want to lay on, or maintain tariffs, they can get their oil and food elsewhere - for as long as supplies last.

Right now, Trump is threatening everyone and his hairdresser with Tariffs. As a threat, I can see the use. But Tariffs ARE GOOD FOR NO ONE! Yes, others tariff our goods. That makes them more expensive in their countries. The smart move is to sell to low or no tariff countries, not make the stuff we buy more expensive as a countermove. Ha-hah! Now we’re paying 25% more for our medicine bottles! Take that China!

At the end of WWII we set up a “world order” for lack of a better term. At Bretton Wood, the United States agreed to become the guardian of international trade. This protection was offered to any country who stood with us against the Soviets…and a few who didn’t.

At the time, we also had nations rebuilding from now two world wars and what we called the Third (or developing) World. Tariffs were thought to be a means by which these nations would finance reconstruction or develpoment. The problem is, that once these former ankle biters became powerful economies, the tariffs remained in place. Canada, on the short-sighted assumption that the world would always be this way, has build it’s entire economy with tariff protections as a loadbearing wall. If the Donald slaps Canada as hard as he threatens to, the country will go under immediately.

Trump is absolutely right to tell these people to kiss his white ass over tariffs, but installing our own, won’t solve anything.

DJT can use trade bariers, including tariffs, to destroy competing economies. But if we haven’t replaced everything we buy from these places, that hurts the average American as well. And if Trump pulls the trigger on all his threats we need to settle in for a very bumpy ride. When the dust settles, we will end up with either very much the same situation we have now (see previous Trump dust ups with Germany and China) OR we will find ourselves in a world where some of the biggest players on the world stage won’t be viable economies anymore. Germany, Canada and China cannot withstand a trade war.

It’s worth noting that Trup has once again slapped tariffs on aluminum and steel. Great. But he hasn’t tariffed bicycles and washing machines. Result? Our companies have a harder time making things with those raw materials. But China, and others, get to sell their protected finished goods on our markets. Anticipate them being dumped at fire sale prices.

Tip Jar

2024

I wrote the segment below in 2015 and I’ve added some updates. And although TPP would eventually fail, the power behind the concept is still very much alive.

This is among the MANY issues Trump must address in the next year. To create actual free trade among our trading partners would be truly revolutionary. But there is a price to be paid for everything, right? China would not survive this. That’s fine with real free trade advocates. But you will quickly find out what everything you pay for is actually worth. Some things would be come less expensive, others will be more so.

Choose carefully.

2015

The government is notorious for creating terms that are utterly devoid of truth. Affordable Care Act leaps to mind. So I will occasionally dedicate space to the vetting of a fun canard.

This week, free trade agreements.

Does anyone know who Fred Hochberg is? I didn't until today. He is the present head of the Import-Export "Bank" of the United States. This is a government monster created by, get this, executive order in the 1930s to finance trade to other countries; trade so risky and/or worthless, that no bank would bother to get involved. It has since grown into a cabinet level function of the government. And it’s not a bank. It’s a conduit of money to cronies. Have you ever heard of this creature? No? Well, too bad, because keeping this obvious moral hazard alive is the price we are paying for this week's canard. See the embedded videos below. One is the short argument to dump the program. The second goes more in depth.

The Transpacific Partnership Agreement (TPP), some people calling it the Asian free trade agreement, is by itself a red herring. It is touted by supporters as a bill designed to help American goods get to market.

Problem: There is nothing FREE about it. This (and What is called "Fast Track”) is an example of Congress once again handing its power to the executive branch ostensibly to foster faster trade deals with foreign countries and "help the American worker". (I am blowing raspberries.) How could anything negotiated by a few heads of state, always done in the interest of selected corporate "winners" and handed to our Legislative branch for an up-or-down vote without amendment be called free? Further, in this case, the power is being handed to the man who set back-to-back billion dollar records for selling influence to major corporations. A man with only two desires applicable; the acquisition of personal power (he only has two years left and is in dire need of a success) and selling the aforementioned influence. This will set him up for his multimillion dollar paydays after he leaves office. Even if we had a 100% pure and honest broker in the oval office, there would be nothing free about this or any other trade deal that would be made by anyone other than the parties buying and selling their goods.

In order to get enough liberals to vote for this free trade myth, McConnell - who appears to be missing a jaw bone as well as a spine - agreed to make the survival of the Import-Export "Bank" part of the bill. Of this move, Mitch said that although he doesn't support the phony bank, those that do support it are entitled to a vote. Aww, too bad his predecessor didn't feel that way when Obamacare was rammed through without real debate or substantial amendment and one-sixth of our economy was being hijacked. At the time, McConnell was on all fours, pants around his ankles saying, "Do me again, Harry!"

Anywho, according to AP's Myway.com, this all came with the "usual presidential phone calls, closed-door Capitol meetings and urgent, private pleadings. [Emphasis mine] A cute side note: The president stayed up late into the night making phone calls to keep this bill alive. Hmmmm… Well where the hell was he on 9/11/12?

Obama NOW: I want more personal power, so I'll stay up all night in order to get it.

Obama THEN: Someone is attacking my ambassador in Libya? Oh well, do what you can. I have a fund-raiser tomorrow. I have to go night-night.

2024 Update:

If you don’t believe me about Obama and multi-million dollar paydays, consider this. With TPP he was trying to please cronies the same way he had with Smash and Grab, which was a scam he played throughout his presidency with his rich crony buddies. His administration was shot through with corruption. It was obvious in 2015. He is now worth hundreds of millions. He’s a good speaker, but NOBODY is that good a speaker.

He’s dirty. Read Secret Empires by Peter Schweizer